We recently published a list of 12 Penny Stocks with Insider Buying in 2025. In this article, we are going to take a look at where Taboola.com Ltd. (NASDAQ:TBLA) stands against other penny stocks with insider buying in 2025.
Insider trading can be a reliable signal for gauging the degree of confidence that management has in the future of their company. This practice has been supported for decades by leading investors and analysts, who claim that there is only one reason for insiders to buy shares of their own companies – if they strongly believe the share prices are going to rise significantly. We discussed the theory behind insider buying in one of our recent articles named 10 Large-Cap Stocks with Insider Buying in 2025.
Insider buying can be an even more significant signal in the case of penny stocks, which are usually small- or micro-cap companies, because these stocks are often underfollowed or not followed at all, leading to significant price inefficiencies and overreactions from investors. This, in turn, may create pockets of opportunity that insiders exploit by leveraging their confidential information and visibility. Furthermore, given the smaller market cap, insiders can exert significant upward pressure on the stock price, which may help boost morale among shareholders.
READ ALSO: 10 Technology Stocks with Insider Buying in 2024
Empirical studies suggest that small caps tend to underperform relative to large caps during tough economic conditions, such as slowing GDP growth, inflation, high interest rates, and other exogenous pressures. Many believe that the US has already entered a new regime, called “Trump 2.0,” which will be dominated by higher inflation, lower economic support from government spending, and reduced availability of cheap labor, among several other possible challenges. Some surveys have hinted at a deteriorating business outlook among small- and mid-sized businesses, marked by lower CapEx budgets. Yardeni Research charts show that small-cap forward earnings have lagged significantly behind large caps since 2023. On top of that, the new economic regime in the US could further exacerbate these discrepancies and lead to greater relative underperformance of small caps, including penny stocks.
While the aforementioned developments could be bad for existing penny stock investors, they could also create investment opportunities for new investors. As the US broad market is still trading near its all-time highs, it has become increasingly difficult to find undervalued or even fairly valued large- and mid-cap companies. In such an environment, investors seeking higher returns may turn to smaller, lesser-known stocks with strong growth potential. The key takeaway for investors is that penny stocks could offer much more attractive, high-upside opportunities than large caps, and watching insider buying signals provides further reassurance regarding stock picking.
Our Methodology
We used Insider Monkey’s insider trading stock screener to find penny stocks trading under $5.00 share price with at least two insiders buying shares worth at least $100,000 in the last six months. We believe that multiple insiders buying significant amounts of stock represents a higher chance that insiders have high confidence in the company. For all the companies, we also include the number of hedge funds holding stakes in them, tracked by Insider Monkey as of Q4 2024. The stocks are ranked according to hedge fund positions.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close up of a mobile device displaying a customized AI-based algorithm interface.
Taboola.com Ltd. (NASDAQ:TBLA)
Number of Hedge Fund Holders: 28
Taboola.com Ltd. (NASDAQ:TBLA) is a technology company specializing in content recommendations across the open web. Leveraging an AI-based algorithmic engine, TBLA partners with digital properties, including websites, devices, and mobile apps, to suggest editorial content and advertisements to users. The company’s platform enables over 1.4 billion people to discover new and relevant content, enhancing user engagement and monetization opportunities for publishers. Advertisers utilize TBLA’s services to reach extensive audiences, driving conversions and business results.
Taboola.com Ltd. (NASDAQ:TBLA) achieved record financial performance in 2024, delivering gross profit of $667 million, representing 25% growth YoY, and adjusted EBITDA of $201 million, which more than doubled from the previous year. The company significantly exceeded its free cash flow target, generating $149 million, which was 49% above the original minimum target of $100 million. In a strategic shift, TBLA announced the launch of Realize, a new performance advertising platform aimed at expanding beyond native advertising to capture a $55 billion market opportunity in performance advertising.
For 2025, management is guiding for 2% gross profit and 2% adjusted EBITDA growth, maintaining a 30% EBITDA margin. To demonstrate confidence in its future, Taboola.com Ltd. (NASDAQ:TBLA) announced a $200 million expansion to its buyback authorization, bringing the total current authorization to approximately $240 million. The company’s strategy focuses on three main assets: unique first-party data reaching 600 million people daily, AI capabilities with 650 engineers, and unmatched supply partnerships with major publishers like NBC News, Disney, Yahoo, and Apple. The strong outlook is supported by at least two insiders buying more than $100,000 worth of company stock in the last six months.
Overall, TBLA ranks 1st on our list of penny stocks with insider buying in 2025. While we acknowledge the potential of TBLA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TBLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.